For several years now I have been tracking industry productivity or output. Productivity improvement is important for any industry, and its just as important that producers should know whether progress is being made, at what rate, and in what manner. This brief discussion explores some of these factors.
Recent claims that the cattle industry is producing as much or more beef from a smaller herd have induced me to offer some data to substantiate or challenge this assertion.
In Canada we have a very good, but imperfect, data base upon which to evaluate industry performance from year to year. Much of it is supplied by Canfax, but other sources are available — trade data, Statistics Canada and USDA Foreign Agriculture Service. Not all of these sources agree and thus in the more thorough discussion of my database, I take careful note of discrepancies. One of the main imperfections is the fact that it is difficult to accurately estimate the variable contribution made by the dairy sector which supplies a modest number of dairy or dairy-cross steers and a large number of culled cows. There is now good information from the dairy sector on dairy cow culling rates but the proportion of dairy steers is difficult to pin down.
Acknowledging these imperfections let’s look at the data. This data relates steer and heifer marketings in any year to the “lagged” cow herd as it was the year the steers and heifers were born.
The table below shows the average number steers, heifers, cows and bulls marketed per 100 beef cows and bulls from 2006 to 2015 inclusive. The year-to-year variability of this average number is called the Standard Deviation (SD). The cows are counted as the number reported in the July 1 inventory estimates, with the cow numbers properly lagged and weighted so that the steers and heifers marketed are related to the cow numbers one and two years earlier. This analysis begins with “cows that have calved” and, as such, does not measure reproductive performance. It just measures how many steers and heifers reached market from the cows that had calves at foot.
I have been able to remove the influence of the dairy culled cow supply because we now have quite reliable estimates of dairy cow culling rates. Insofar as dairy steers are concerned, I made the approximation in this analysis that a maximum of 20 per cent of the male dairy calves (10 per cent of the dairy cow inventory) escape the veal route and are fed out as fed dairy or dairy cross steers. Dairy heifers are in such constant demand as herd replacements or for export as “springer” heifers that their number in domestic fed cattle slaughter is negligible.
On the basis of the above, the number of beef steers marketed per 100 beef cows from 2006 to 2015 averages 42.9 with a standard deviation of + or – 2.4. Considering the need to retain at least one to three intact male calves for breeding, this analysis suggests that three to four to five (about seven per cent) are missing. Some small portion of this may be attributable to a few cows that did not have calves at foot but were being held for breeding, but the balance implies death loss at some point between birth and slaughter. (Many will argue that they keep no intact males, that being the business of seed stock breeders. No matter, I am discussing industry averages here and it doesn’t matter in which herds the intact males were reared.)
The number of beef heifers per 100 beef cows has averaged 29.2 head + or – 2.3 head. Normally heifer marketings are noticeably more variable than steer marketings due to the variable rate of heifer retention during the different phases of the cattle cycle. However, the beef cow herd has been in contracting mode continuously since 2005 so this variability is not apparent.
The average number of beef cows culled per 100 beef cows is 9.4 head and the average number of bulls is 1.3. Other estimates by other methods peg the average beef cow culling rate at about nine per cent and this is consistent with the above methodology. Bull numbers are low and, other than posting the number in the table above to complete the productivity analysis, were ignored.
I was concerned that not having a firm estimate of the sex ratio (steers to heifers in slaughter and feeder cattle exports so, I conducted a simple test to measure the outside limits of the distortion this would cause. In 2015, 217,826 “steers and heifers” and 287,855 feeder cattle were exported. The table displays the steers and heifers per 100 beef cows when these exports were assigned the same ratio as occurred in the domestic slaughter. When I adjusted the sex ratio of these exports to 50:50 the steers and heifers per 100 beef cows became 45.4 and 27.1, respectively. When I tested the practical limits of 67 per cent steers and 33 per cent heifers, the number of steers and heifers per 100 beef cows became 46.3 and 26.1, respectively. Finally, I reversed this ratio to 33 per cent steers and 67 per cent heifers; the output per 100 beef cows became 44.4 to 28.0. My conclusion is that while efforts need to be made to get a reliable sex breakdown on exported slaughter and feeder cattle, the analysis upon which this article is based is not greatly affected by this lack of certainty.
Three charts now display the trend line of this productivity analysis. While this analysis focuses on the period 2006 to 2015 inclusive, the charts display a longer trend line back to 1998. Readers should be aware that marketing numbers were severely disrupted, especially of cows in 2003 and 2004, due to the BSE incident.
The first chart (below) shows the number of steers, heifers and cows marketed per 100 beef cows over the period.
The trend lines for heifers and cows are not as indicative as the trend line for steers because heifer and cow marketings reflect replacement and culling decisions and do not necessarily denote a change in productivity. The trend line for steers hovers between an unrealistically low 39 and 46. The lower numbers in 2005 and 2006 reflects the fact that a significant number of open cows were retained as their owners were simply awaiting available slaughter capacity and higher culled cow prices. Other than that, there is no trend line in steer marketings.
The second chart (below) shows the pounds of steer, heifer, cow and bull beef per beef cow.
The long term clearly indicates a significant upward trend for steer beef and cow beef but a downward trend for heifer beef, which parallels the downward trend in numbers. But it should be apparent that the increase in output per cow may be largely, if not totally, the result of larger cows.
The obvious way to assess that is to express beef output, not on a per cow basis but on the basis or output per hundredweight of cow. This was done by estimating the live cow weight from the carcass weight of culled cows. While this is an imprecise indicator of live weights, one would not expect any significant year-to-year variation in the ratio of cow carcass weights to live weights.
When this is done, the trend line for steers is absolutely flat. The industry is producing more steer beef per cow but when adjusted for cow weight there is no increase at all. Notice that the scale has changed on the X axis to accommodate lower numbers and this tends, relative to the other two charts, to exaggerate minor variations. For example the entire range in steer beef production per cwt of cow weight is from a low of 19.5 lbs. in BSE-influenced 2005 to a high of 23.2 lbs.
The conclusion that must be drawn from this data is that improvements in productivity from year to year as indicated by increased marketings of steers and heifers per 100 beef cows since 2006 have been slight to non-existent. The output per cow has shown a very modest rising trend but a trend that disappears when adjusted to the weight of the mother cow. In fact, if one looks at carcass grading data, it is apparent that the proportion of low-yielding fatter Y3 carcasses has increased at the expense of higher-yielding Y1 carcasses so this would further moderate any apparent increase in productivity.
There are, of course, other ways to measure productivity than as simply output per cow. Rate and efficiency of gain have unquestionably increased markedly in recent decades. I can recall in the early 1960s, when I managed a bull testing station, being excited if we had a young bull gain three pounds per day or slightly more when on a full feed of high-energy grain. Unquestionably we have better cows today that are producing beef more efficiently but the annual output per cow, or per cwt of cow, has not changed significantly in recent years.
This analysis addresses output per cow when measured against the July 1 annual inventory of cows. Since the analysis begins with a cow with calf at foot it does not provide a measure of reproductive efficiency.
Certainly the claim that the industry is producing more beef with fewer cows is accurate. But two obvious considerations have been ignored in such a claim. First, and obviously, the national herd has been in steady decline since 2005 and has lost 1.5 million cows. These cows contributed significantly to the beef supply. Second, as this analysis shows, the output per cow has indeed increased, but not at all when adjusted for increased cow size.